Was down caving and went to combine two pickaxes (it IS possible that they had the same damage amount when I went to combine but i can't confirm) and for some reason i could just keep taking the new and improved pickaxe. Combined two of these duplicated picks with the same result: endless supply of new pickaxes. Works with armor and all other tools. Everything that was duplicated functioned properly. Restarting didn't stop it from occurring. THis was a new world and i had not combined anything else in the 2x2 crafting grid in the inventory screen. Also, the two items getting combined do not disappear after i take the combined item out,